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Thursday, January 31, 2008

What they ruled is that the cities exercising home-rule authority to establish red light/speed cameras are not in violation of the state constitution. They opine that the automated enforcement is a supplement to - not a supplanting of - state law and, as such, is allowed.

They did NOT address the due process issues of the civil violation processes that have been established, as that question was not before them.

Chris Finney, Cincinnati attorney who's been a guest on Eye On Toledo to talk about the red light cameras, will call in to the show at 6 p.m. to discuss this ruling and the need to address the red light/speed cameras via an amendment to city charters.

Yep - as if they don't have enough to do preventing those dangerous face creams in containers larger than 3 oz from getting on board a plane, they've now launched a blog.

While I appreciate their effort to garner feedback, I'm not sure they're going to like what they read, considering most people's experience with the ridiculous regulations they're charged with enforcing.

And in all fairness, it's really not the fault of the individual screeners that they're tasked with just nonsense ... but they do have some discretion in how they carry out their duties and there is significant room for improvement in that area as well.

From their welcome post:

"There isn’t much opportunity for our Security Officers to explain the ‘why,’ of what we ask you to do at the checkpoint, just the ‘what’ needs to be done to clear security. The result is that the feedback and venting ends up circulating among passengers with no real opportunity for us to learn from you or vice versa. We get feedback verbally and non-verbally at the checkpoint and see a lot in the blogs, again without a real dialogue.

Our ambition is to provide here a forum for a lively, open discussion of TSA issues. While I and senior leadership of TSA will participate in the discussion, we are turning the keyboard over to several hosts who represent what’s best about TSA (its people). Our hosts aren’t responsible for TSA’s policies, nor will they have to defend them -- their job is to engage with you straight-up and take it from there. Our hosts will have access to senior leadership but will have very few editorial constraints. Our postings from the public will be reviewed to remove the destructive but not touch the critical or cranky.

Please be patient and good-humored as we get underway. The opportunity is that we will incorporate what we learn in this forum in our checkpoint process evolution. We will not only give you straight answers to your questions but we will challenge you with new ideas and involve you in upcoming changes."

When government actually solicits feedback, we should respond. So, if you've got thoughts to share, please be sure to do so!

That's the question and it's permeating the internet and blogosphere. In looking for what will or might occur and what language is included in the House stimulus package, I came across this entry from The Crypt, the blog for Politico.com.

As they explain, the problem is with the way that individuals file their taxes. Many use Individual Taypayer Identification Numbers (ITIN), rather than Social Security numbers. Both legal and illegal immigrants use ITINs. If the Senate prohibits rebates to individuals who use ITINs, they'll keep some people, who are here legally, from getting the funds.

"A spokesman for House Minority Leader John A. Boehner (R-Ohio) points out that illegal immigrants are ineligible for any rebates and are committing tax fraud if they fraudulently obtain taxpayer ID numbers to file tax returns. Republicans also issued a memo Wednesday trying to defuse any controversy over immigrants and tax rebates.

"The bill includes language similar to the provisions included in the 2001 and 2003 tax relief bills designed to prevent illegal immigrants from receiving benefits," Boehner spokesman Kevin Smith said. "There is no language in the measure that would enable illegal immigrants to receive a tax rebate.”"

The real problem with this is that the IRS, not being a law enforcement agency, doesn't check to see if the person using an ITIN is in the country legally or not.

"Mark Krikorian, director of the Center for Immigration Studies, a conservative organization, says the problem is not with the economic stimulus bill but with the lack of coordination between the IRS and immigration enforcement agencies.

"If the IRS was cooperating with Social Security or DHS [Homeland Security] ... they would know who the illegal immigrants are who file tax returns," Krikorian said."

I don't care whether illegals in this country pay taxes or not. The fact that they're here illegally should be cause enough to disqualify them from participation in any so-called stimulus rebate.

Wednesday, January 30, 2008

The London Telegraph is reporting that the doctors believe "smokers, heavy drinkers, the obese and the elderly should be barred from receiving some operations." The reason for the hard hearts in Britain: The government-run National Health Service (NHS) can no longer afford to provide free treatment for everyone.

So for Britons, health care rationing isn't just a threat, it's a reality, says Investor's Business Dailey (IBD):

The Telegraph says roughly one in 10 hospitals -- usually those with financial problems -- now deny some surgery to smokers and the obese.

* So that billions of dollars can be cut from the bloated NHS budget, they have ruled that some advanced treatments -- such as drug-coated stents used to prop open coronary arteries -- will not be available.* Even worse, officials have begun to encourage Britons to turn to "self care" in lieu of physician visits.

On a moral level, the doctors have a point: Taxpayers shouldn't have to subsidize care for those who make poor choices and then expect others to pay for their mistakes. But that's exactly what universal health care does, and that's one of its primary flaws. It promises people that they'll be cared for no matter what they do to themselves. When the consequences of bad behavior are eliminated, there's a strong incentive to behave badly.

The threat to cut benefits to the old and the unhealthy in Britain is a clear confirmation that health care can never be free. Someone has to pay for it, and those people in Great Britain are so stretched that they can't meet every demand, says IBD.

Couple this 'policy' with the information in Jonah Goldberg's recent column, and you'll see a disturbing trend. After a litany of bans on everything from pit bulls, trans fats, aluminum baseball bats, candy cigarettes and the circus; proposals to mandate government control over the temperature on your thermostats; and 'no running' signs on playgrounds, Goldberg writes:

"Much of this, as Reason magazine's Jacob Sullum has long argued, stems from the "totalitarian" temptation inherent to seeing health care as a sub-category of politics and policy. When government picks up the tab for health costs, it inevitably feels it is responsible for curtailing them through "prevention," which can often elide into compulsion. As Faith Fitzgerald, a professor at the University of California-Davis School of Medicine, put it in the New England Journal of Medicine: "Both healthcare providers and the commonweal now have a vested interest in certain forms of behavior, previously considered a person's private business, if the behavior impairs a person's 'health.' Certain failures of self-care have become, in a sense, crimes against society, because society has to pay for their consequences."

But there's another factor at work as well. We are seeing a return to the idea - first championed by social planners in the progressive era - that government can and should play the role of parent. For instance, Michael Gerson, once a speechwriter for President Bush, advocates a new "heroic conservatism" - an updating of his former boss' compassionate conservatism - that would unleash a new era of statist regulations. On the stump, Hillary Clinton refers to her book, "It Takes a Village," in which she argued that we all must surrender ourselves to the near-constant prodding, monitoring, cajoling and scolding of the "helping professions." Clinton argues that children are born in "crisis" and government must respond with all the tools in its arsenal from the word go. She advocates putting television sets in all public gathering places so citizens can be treated to an endless loop of good parenting tutorials.

Mike Huckabee, who represents compassionate conservatism on steroids, favors a nationwide ban on public smoking. Everywhere, from Barack Obama to John McCain, we are told that our politics must be about causes "larger than ourselves." What we used to think of as individual freedom is now being recast as greedy and selfish.

Perhaps we should remember these words from Alexis de Tocqueville:

"Democracy and socialism have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude."

"The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money."

In light of the so-called stimulus plan (which I don't think will 'stimulate' anything positive), I thought this quote from The Patriot Post particularly timely:

"There is no part of the administration of government that requires extensive information and a thorough knowledge of the principles of political economy, so much as the business of taxation. The man who understands those principles best will be least likely to resort to oppressive expedients, or sacrifice any particular class of citizens to the procurement of revenue. It might be demonstrated that the most productive system of finance will always be the least burdensome." ~ Alexander Hamilton (Federalist No. 35, 1788)

Tuesday, January 29, 2008

UPDATE 2: The Wall Street Journal had a good column (may require subscription) with answers about the stimulus plan. Some of the Q&A:

Q: Do I have to file a federal income-tax return for 2007 in order to get something this year?

A: Yes. "You have to file a return for the 2007 tax year in order to receive a rebate check" during 2008, says an aide to Senate Finance Committee Chairman Max Baucus.

The IRS "will calculate the rebate from that return, estimating the reduction in tax liability for 2008 that results in the rebate check," the aide says.

Q: Do I have to figure out how much I'm supposed to get this year?

A: No. You don't have to apply. The Internal Revenue Service is supposed to handle it for you. As one congressional staffer put it, "all you have to know how to do is open an envelope" -- or tell the government how to zap your money electronically into your account.

Q: Will Uncle Sam tax these payments?

A: No, say representatives of the U.S. Treasury Department and congressional tax-writing committees.

Q: But what about all these rumors that the payments will cut into what I get as my refund next year?

A: They're wrong, congressional staffers say. "Please be aware that there have been erroneous reports that stimulus rebate checks are an advance on next year's tax refund, so that any refund a taxpayer might normally receive would be reduced by the amount of the 2007 stimulus check," says the Baucus aide. "This is not correct."

Amy McAnarney, executive director for H&R Block's Tax Institute, says, "The actual credit will be calculated on your 2008 return. If you're due a higher credit, you'll get the remainder next year when you file. If you received a higher credit than you should have, you do not have to pay anything back."

"What might happen next year," a House staffer says, "is that somebody who didn't get their full amount this year could get more, based on their return for 2008. For example, if you had a child born in 2008 and you were within the income caps, you'll get another benefit of $300 next year when you file your return for 2008."

UPDATE 1: Here is the breakdown of who gets how much based upon the proposal, which may be changed by the Senate.

If your adjusted gross income (AGI) is less than $3,000, you get nothing.If you are single and your AGI is $3,000 to $6,000, you will get $300 to $600 plus $300 per child.If you are single and your AGI is $6,000 to $75,000, you will get $600 plus $300 per child.If you are married and your AGI is up to $150,000, you will get $1,200 plus $300 per child.If you are single and your AGI is over $75,000, you will get $600 plus $300 per child, less 5% for every $1,000 over the $75,000.If you are married and your AGI is over $150,000, you will get $1,200 plus $300 per child, less 5% for every $1,000 over the $150,000.

Total package is estimated at $150 billion with about $28 billion going to individuals who paid no taxes. Timeframe for actually receiving the funds could be as early as May, though most estimates are for July or later.

–noun 1. a return of part of the original payment for some service or merchandise; partial refund. –verb (used with object) 2. to allow as a discount. 3. to deduct (a certain amount), as from a total. 4. to return (part of an original payment) 5. to provide a rebate for (merchandise) after purchase. [Origin: 1400–50; late ME rebaten (v.) < OF rabatre to beat, put down, equiv. to re- re- + (a)batre; see abate]

This means that, in order to qualify for any sort of rebate, an individual must have, by definition, first paid something. If the second definition is used, there must first be something owed in order to allow as a discount.

In sticking with the definition, only individuals who've actually paid federal taxes and not gotten all of them back as part of a refund, should be eligible for a rebate.

By definition, individuals who've paid no taxes should not be eligible for anything under this portion of the so-called stimulus plan.

Yeah - right. Who thinks that Congress or the President will insist on following the definition? Anyone?

What's going to happen is that our elected officials will take to the microphones to espouse a redistribution of wealth under the guise of 'fairness' by saying it isn't fair to give money back only to the 'rich.' That the 'less fortunate among us' also deserve some 'help.'

How fair is it to give a rebate to those who've not paid anything in the first place? If a person walks into your store and demands a rebate without purchasing the required products, you'd laugh and tell him to get lost. But somehow, our elected officials seem to think that this same scenario is not only logical but 'necessary' when it comes to the proposed tax rebates.

It's redistribution of wealth under the false assumption that taking from the taxpayers and giving cash to everyone, regardless of prior payments, will somehow stimulate the economy.

They're wrong - and any amount of common sense would demonstrate just how wrong this is. But that's never stopped them before - so expect it to happen anyway, with the hoped-for results never materializing.

Monday, January 28, 2008

“From expanding opportunity to protecting our country, we have made good progress. Yet we have unfinished business before us, and the American people expect us to get it done. In the work ahead, we must be guided by the philosophy that made our Nation great. As Americans, we believe in the power of individuals to determine their destiny and shape the course of history…So in all we do, we must trust in the ability of free people to make wise decisions, and empower them to improve their lives and their futures.”

On the economy:

“To build a prosperous future, we must trust people with their own money and empower them to grow our economy. As we meet tonight, our economy is undergoing a period of uncertainty… And at kitchen tables across our country, there is concern about our economic future. In the long run, Americans can be confident about our economic growth.”

On earmarks:

“The people's trust in their Government is undermined by congressional earmarks…”

On the importance of trade:

“On trade, we must trust American workers to compete with anyone in the world and empower them by opening up new markets overseas. Today, our economic growth increasingly depends on our ability to sell American goods, crops, and services all over the world… These agreements will level the playing field. They will give us better access to nearly 100 million customers. And they will support good jobs for the finest workers in the world: those whose products say ‘Made in the USA.’"

“If we fail to pass this [Colombia free trade] agreement, we will embolden the purveyors of false populism in our hemisphere. So we must come together, pass this agreement, and show our neighbors in the region that democracy leads to a better life.”

On the surge in Iraq:

“The Iraqi people quickly realized that something dramatic had happened. Those who had worried that America was preparing to abandon them instead saw…our forces moving into neighborhoods, clearing out the terrorists, and staying behind to ensure the enemy did not return…While the enemy is still dangerous and more work remains, the American and Iraqi surges have achieved results few of us could have imagined just 1 year ago…”

On the American people:

“The secret of our strength, the miracle of America, is that our greatness lies not in our Government, but in the spirit and determination of our people.”

Empowering Americans With Affordable Options For Health Care President Bush Calls On Congress To Pass Standard Deduction For Health Insurance, Lays Out Key Elements Of Agenda To Empower Consumers And Make Basic Private Health Insurance More Affordable

Tonight, President Bush will call on Congress to eliminate the unfair bias in the tax code against those who do not get their health insurance from their employer. This would make basic private health insurance more affordable for millions and give patients more choices and control over their health care. Instead of favoring Americans who get health insurance through their jobs, the President has proposed reforming the tax code with a standard deduction for every American who buys health insurance, whether they get it through their jobs or on their own.

President Bush Has A Strong Agenda To Expand Access To Affordable Health Care And Empower Consumers To Receive Treatment That Best Meets Their Needs

The President believes the Federal government can help make health care more accessible and affordable, while leaving medical decisions in the hands of patients and the doctors that treat them. The President believes as many Americans as possible should have private health care coverage, which is better for consumers because it offers choice, flexibility, and increased quality of care through competition. His health care agenda will help more Americans receive the health care they need at a price they can afford, while empowering consumers to make their own decisions to best meet their health needs.

The President reformed Medicare to add a prescription drug benefit and give beneficiaries more private plan choices. These programs have been a great success for our Nation's Medicare beneficiaries. The Medicare prescription drug benefit is now in its third year of operation and more than 32 million beneficiaries, including nearly 10 million low-income beneficiaries, now have coverage in a standalone drug plan, through a Medicare Advantage drug plan, or through their employer retiree plans. Thirty-nine million, or close to 90 percent of eligible beneficiaries, now have creditable drug coverage through Part D or another source, and the estimated costs of this program to taxpayers have declined about 38 percent since enactment. Nearly nine million beneficiaries are enrolled in Medicare Advantage and receive their comprehensive Medicare benefits through a private plan option.

The President has proposed expanding Health Savings Accounts (HSAs). In 2003, President Bush signed into law HSAs to allow people to save money for health care tax-free, and to take these accounts with them as they move from job to job. These portable accounts are affordable for individuals and small businesses, and they offer consumers greater ownership and control over their health care decisions. In 2007, there were 4.5 million Americans enrolled in consumer-directed health plans with HSAs. The President has proposed policies that would expand the HSA option to more Americans.

The President has taken steps to increase the transparency of America's health care system and empower Americans to find better value and better care. He has directed Federal agencies to share information with beneficiaries about prices paid to health care providers for procedures and about the quality of services provided by doctors, hospitals, and other health care providers. Increased transparency about prices and quality will help bring more competition to health care and enable consumers to make better health care purchasing choices.

The President is working to improve the adoption of health information technology. Electronic health records show promise as a tool to help improve the efficiency and effectiveness of medical treatment. In 2004, the President launched an initiative to make electronic health records available to most Americans within the next 10 years. Health IT systems can give citizens better access to their health information, resulting in informed decisions about their care and a better understanding of the quality of the care they are receiving. In 2006, the President directed Federal agencies to use improved health IT systems to facilitate the rapid exchange of health information.

The President has proposed strengthening the buying power of America's small businesses by forming Association Health Plans (AHPs). To help make the costs of providing health insurance more affordable, small businesses, as well as civic and community groups, should be allowed to band together in AHPs to get the same discounts big companies receive.

The President has proposed medical liability reforms to limit costly and frivolous lawsuits. These lawsuits are driving many health care providers out of communities and forcing doctors to practice overly defensive medicine. This reduces access to medically necessary services and raises the costs of health care for all Americans.

The President supports permitting the purchase of health insurance across State lines. Americans should be allowed to buy the best health insurance for themselves, based on their own circumstances, instead of being limited to only the policies available in their State.

When I first became a Lucas County Commissioner, many of the lessons learned from Sept. 11, 2001, in terms of what local governments needed to do in order to better prepare, were recommendations waiting to be implemented.

Interoperability - the focus of allowing all law enforcement, fire and first responders to communicate seamlessly - was one of them.

Through the emphasis of Sheriff James Telb, the weapons of mass destruction task force, the 9-1-1 emergency phone system committee and all local fire and police chiefs, interoperability is here.

The commissioners supported the recommendations from the various groups that federal funds coming into Lucas County be dedicated toward this system (along with personal protective equipment for all first responders). Portions of the 9-1-1 Levy were also targeted for this function.

Land was purchased or leased or dedicated for the towers necessary to the system and all jurisdictions got a portion of the costs for their individual radios paid for.

The critical point was that everyone had to be a part of the system, for without total support from all jurisdictions, the goal of everyone being able to talk to each would not be accomplished.

Many politicians in this area talk about 'regional cooperation.' But they often fail to recognize the excellent cooperative efforts that already exist, especially in the courts, law enforcement and fire/first responder areas. It was truly refreshing to participate in the various groups and committees and see them all agree that, as important as their individual needs were, the overall community - including the people they represented - would be better served by having this capability.

It's been a long process to review the various types of 800 MHz systems, decide on a particular one and a company to provide it, locate the towers, agree upon the radios, coordinate with all the cities, villages and townships to purchase the radios, pay for the system and then bring everyone on line. But it was worth it to have everyone in the county on one system.

Kudos to all those involved in the process and to the local police and fire agencies who supported it and agreed to participate!

An editorial in today's Blade says that calls to defeat Toledo's 3/4% payroll income tax are wrong, considering the serious impact such a defeat would have on the city.

But then they say:

"We have argued over the years that the surcharge should not be made permanent, as is the 1.75 percent payroll income tax, but that renewal should be required from time to time specifically so residents can express their opinion on how the city is run."

Their point seems to be that we should only threaten non-renewal during better economic times.

But how then, would that express our opinion of how the city is being run?

If the renewal is only challenged when it's not needed - or when the city might be able to absorb such a cut in funding - then it isn't a valid tool for forcing change or providing feedback about dissatisfaction with spending.

This temporary tax has become a necessary portion of city revenue only because the council and mayor have become dependent upon its constant renewal. They continue to spend as if this money will always be there, and they appeal to the fears of citizens by threatening police and fire as the first cuts if the tax is not renewed.

Rev. Floyd Rose, and several callers to my Eye On Toledo radio show, have urged the defeat of this tax because they believe it is the only way to actually get the attention of the elected officials. If other methods had proven successful and we were actually seeing city government be responsive to problems and concerns, such levy opposition wouldn't be materializing.

Calls for defeating the levy should be a wake-up alarm for all our elected officials - but if various editorial boards and organizations (community and unions) support this levy as is, it will provide cover for the elected officials to continue in their current ways and will give them the excuse to ignore the demands for change.

Another thing to consider is that support for the status quo may backfire by energizing the over-taxed and frustrated citizens who are considering opposition to this measure.

If voting for the tax is the method for expressing dissatisfaction with the way the city is being run, I believe it is a contradiction to say that citizens should only do so when the city can survive the impact of the defeat.

For years, dire consequences have been the only prediction for the defeat of this tax. If the city has become so dependent upon this tax that dire consequences are the only option if it doesn't pass, maybe it's past time for us to vote no.

As expected, The Blade editorial board has taken a swipe at the pay of Jim Hartung, president of the Toledo Lucas County Port Authority.

You see, they don't think he should get pay increases - or be paid as much as he is - considering the economic condition of the area. While this has been a consistent position from them, it's wrong.

First of all, they believe the purpose of the Port Authority is to create jobs.

"The Toledo-Lucas County Port Authority, which is charged with economic development, hasn't been able to create many new jobs recently."

The only jobs a Port Authority can create are new positions within their own agency. They don't create jobs. In fact, their purpose is to run the ports.

"Our Vision:To position Toledo as a premier world transportation center.

Our Mission:To assure that the Toledo area's water, air, rail, and surface transportation assets are developed and operated in a cohesive, coordinated and safe manner in order to provide maximum efficiencies and benefits to shippers, receivers, and passengers; to assure optimum business growth, technology development, investment, job retention and improvement in quality of life."

While the Port does have certain economic development tools in that they provide financing options to businesses, it's the businesses that create the jobs, not the Port Authority - or any other economic development entity including the Lucas County Improvement Corporation, the Regional Growth Partnership or the various government departments of economic development.

If entities like The Blade would acknowledge this fact, there wouldn't be unrealistic expectations of elected officials and economic development agencies in terms of what they can actually do. And, we might finally get around to focusing on creating an environment that will help businesses create jobs - rather than taking credit for what the private sector has done in spite of the unfriendly business policies that permeate our area.

The Blade also believes "Mr. Hartung could set a good example for public officials by refusing this ill-timed gift." I'm not sure, in his job description, where it is that the president of a port authority to supposed provide a good example for elected officials...but I think they've got this backward. Isn't it the elected officials who are supposed to provide the example?

And it's not a gift. It's compensation for performance. Interestingly, The Blade - and the elected officials who've criticized the raise and called for it to be 'returned' - have failed to state a performance-related reason for why Hartung has not earned it. Instead, they're appealing to emotion and class envy by implying that since so many people in this area are 'suffering,' other individuals should not prosper.

Besides, if the elected officials really care so much about the impact of salaries and the people who have to pay them, they can start by reducing their own - and the ones of all the government workers. Perhaps, rather than criticize what the Port Board has determined to be good performance, The Blade would like to address their lack of opposition to the Commissioners (by a 2-1 vote) giving Children Services Board employees pay increases of 4%, 3% and 3% over three years - especially when that agency has 2 - yes 2 - levies that support its operations (2.4 mills versus the .4 mills the Port Authority gets).

Then there is the issue of the Port Authority tax levy itself. Throughout their editorial, the reader is given the impression that the levy pays for the salary and is going toward the pay increase.

"... we don't believe such a generous raise constitutes the "wise use of [tax] levy dollars" ..."

"While the port generates income from shipping and airport operations, it also is the beneficiary of some $2.5 million a year that streams from the 0.4-mill property tax levy that was renewed by voters in 2004."

"... port directors are so accustomed to the steady income from the levy ..."

"The Hartung pay raise is a rude slap at those workers and to all those in Toledo and Lucas County who support the port operation with their tax dollars."

"Ninety-three percent of Port Authority funding comes from revenue generated by its operating divisions and its finance programs. This revenue pays for all administrative costs including staff salaries. The other 7 percent comes from revenue generated by its tax levy. That money is used exclusively for capital improvement projects."

And this is consistent with the promises the Port Authority Board made in 2004 - to use these levy dollars in this manner. This levy used to help fund the Regional Growth Partnership before it became a separate, privately-funded organization. After the RGP's break from the Port Authority and public funding, the Port agreed to put a portion of those levy revenues into a Community Economic Development Program. And that's what they did, according to a Blade August 26, 2005, article, "Port authority OKs urban projects - South Branch library included on list for redevelopment grants":

"The port board approved $338,000 to seven nonprofit neighborhood agencies in Lucas County, fulfilling a promise to devote more of its tax- levy revenue to urban projects. ...The port authority , which had been under fire for economic development programs outside Lucas County, in which its 0.4-mill development levy is assessed, agreed as part of a levy renewal campaign last year to set aside $350,000 annually for neighborhood revitalization. The levy generates about $2.2 million a year."

So Hartung's raise does not come from the levy, but from the profit on the operations of the Port Authority itself. The promises made to the public about the levy dollars are being kept. So the levy, itself, should not be a factor in the discussion of Hartung's compensation.

In the end, Hartung's pay is based upon his performance in running the operations of the Port Authority - not upon the overall economic conditions of the County, which is something over which he has absolutely no control. And to even imply that he is responsible for that is ridiculous.

Elected officials, on the other hand, through their policies, actions, taxing, fee structures and spending do have such control and influence. And editorial board members should remember that fact the next time they do endorsements.

Saturday, January 26, 2008

* If government can 'stimulate' the economy by passing some sort of legislative package, why do they wait until the economy is in trouble to do so? If Congress actually can have what they expect to be a positive impact, why don't they do this kind of stuff all the time - or make such things permanent?

My guess is that the answer to this question would prove the falsity of their proposed 'economic stimulus' plan.

* What impact does 1% actually have? Are you wondering what I'm referring to? Well, the stimulus package, of course. The proposed $150 billion package is only 1% of the $14 trillion economy. Even if every person who gets the so-called 'rebate' were to go out and spend it - and that's questionable at best - we're talking about 1%. That's all.

* What good does 'temporary' spending actually do? If people spend these 'rebates' as planned, we'll see a temporary blip - and that's it. After the money is spent, people will go back to what they were previously doing. What then?

* Why does Congress have to do anything in the first place? The economy has been much worse - and recovered - in the past. Why must Congress do something now? Wouldn't doing nothing be better than doing the wrong thing?

* How does someone who's not paid any taxes qualify for a 'rebate'? Isn't a rebate, by definition, a return of funds already paid?

* As Russ Roberts has opined, "whoever gets stimulated is likely to be offset by someone who gets unstimulated.

The money has to come from somewhere. If you raise taxes to fund the plan, the people who are taxed are poorer and they'll spend less. If you borrow money to fund the plan, the people who buy the government bonds have less money to spend and that offsets the stimulus. It's like taking a bucket of water from the deep end of a pool and dumping it into the shallow end. Funny thing—the water in the shallow end doesn't get any deeper.

And even the people who get the money often save more of it than they spend."

So if we're just changing WHO is spending the money, how does that equate to a stimulus? The spending isn't changing, only who is spending the money and what it's being spent upon. How does this help?

* Current estimates are that the earliest people will actually see this money is May with most getting it in July. By that time, the circumstances will be much different. I suppose some might call this time frame 'immediate' when it comes to the federal government...but that's still six months away. What happens if the economy turns around during that time? Will there be some sort of provision that cancels the 'stimulus package' if it's no longer needed by the time the checks are ready to go out?

* Why is government rushing to action when most economists say we're just heading for a recession - not that we're actually in one? The economy is always heading in a direction: either boom or bust. Why does Congress think this particular heading needs to be addressed? Wouldn't it be better to just let the economy go through what appear to be natural ups and downs?

* While I have a philosophical opposition to the idea, many politicians believe it's the role of government to influence/encourage/dictate personal behavior. Good personal financial practices are to spend within your means and save for longer term goals. Doesn't giving money to people "most likely to spend quickly the bulk of any new resources they receive" actually encourage poor fiscal practices? Isn't this actually an attempt to help the overall economy to the detriment of these particular individuals and families?

* Why doesn't Congress focus on long-term solutions rather than short-term and temporary measures? Making the tax cuts permanent, indexing capital gains taxes and the alternative minimum tax to inflation, reducing government spending ... these would be more effective - and longer term - solutions. Are they that much interested in buying votes that they ignore the disease while handing out placebos for the symptom?

* Is it likely that anyone in Congress will be asked - or answer - these questions?

Aside: For an interesting perspective on economic policy, I suggest this column by economist Robert Murphy, which says, in part:

"If the national discussion on monetary policy is bad, the debate over fiscal policy “stimulus” may be even worse. The politicians and pundits never explain how borrowing money from one group of Americans, in order to give tax rebates to a different group of Americans, is supposed to raise total spending. Things would be different if the politicians proposed spending cuts to offset the rebates to taxpayers. But naturally no one proposes such a sensible policy; they want to give us more money to spend, and to spend more money themselves, too.

The truly depressing feature of all the stimulus talk is that even someone as knowledgeable as Treasury Secretary Paulson believes a rebate is only good if the recipients “spend” it, rather than using it to pay down debts. Here we see the true insidiousness of the Keynesian mindset: In a time of recession, when we need to tighten our belts, the politicians encourage us to go buy new cars and plasma screen TVs. The idea seems to be that if we all just ignore the recession, it will get bored and go away."

Friday, January 25, 2008

Yep - that's what so many of us feel like when you have the combination of good ice, decent weather and sufficient wind - which is what we have today and scheduled for the weekend.

Saturday, the Toledo Ice Yacht Club will host the Greiner Open. Skippers Meeting is at 9:30 a.m. Saturday morning. Grab your boats and head on over!

If you're not sure where to go, here is a map with directions to the 125th Street public access with ramp.

I've never met an unfriendly ice boater, so if you're not sure about what's going on, don't be afraid to ask them questions - most will be happy to explain things. However, as they do plan to race Saturday, best to stay away from the race course area after the starts.

If you've never seen ice boating, now is your chance. If you've got kids (in age or in heart) who love to ice skate, the light dusting of snow will not be a hindrance.

Bundle up good, bring the kids, come on out to Point Place and enjoy!

p.s. The photos are from last February. Above and below is a a blue Renegade named "Ragtime" that my father built and my husband, Sam, now sails. The wooden boat is the special two-seater Sam built so we could take all the kids out for a ride. The other boat you're likely to see is a DN, which is the last photo.

Thursday, January 24, 2008

According to The Blade's article about the on-going discussions of establishing wireless internet access in the Toledo City Council offices and meeting chamber, the County may want to partner on the project.

First, you should know that the County has provided wireless access to its own network for several years, in both offices and the Commissioners meeting chambers. This is access only to the County system and is restricted to county employees, though it does allow employees to connect to the Internet through the system.

Having used the wireless access as a Commissioner, I can attest to how convenient it was to be able to bring down only my laptop for meetings - having ready access to electronic copies of documents rather than having to carry papers around. The laptops we used also had a stylus we could use for actually taking notes on the various documents by 'writing' on the screen. The idea was that we would use only the laptops in place of a regular computer on our desk. Many county staff were also converting over to laptops in place of regular computers, so this was part of the on-going/regular computer replacement program.

But the open wi-fi being discussed is much different than simple wireless access to a closed, secure system.

So, the questions that need to be asked in consideration of such a system are:

1) How does adding a new system within the County save the County any money?

"Councilman Joe McNamara said collaborating with the county on the idea would be a step toward cutting spending within both government entities."

As the county already has wireless access to its own system and to the internet through that system, creating a public wi-fi would be a new service and an additional cost which would duplicate existing access for county employees. It would basically be the county paying for the public to access the internet in the building.

It would certainly mean that neither the city nor the county would incur the total costs of any new system. But what is the demand for such a thing? How many individuals have expressed a desire for wireless internet access in either the city council or county meeting rooms? And, if there is such a desire, why should government pay for it when individuals have access to all types of wireless systems through the open market? Many cell phone providers also have plans for wireless internet access, so if someone wants the convenience of wireless access when they go to city council or commissioner meetings, all they have to do is sign up - and pay for it themselves.

If, however, the plan is to provide wireless access to the city's internal system, then there is no reason for the county to expend any monies for that project.

2) If Council decides to move members and staff away from paper and toward computers via use of a wireless system, then they need to understand some of the other costs involved in such a switch. This would require laptops for all councilmen and staff - and also for any administration who might find use of such convenient during their appearances at council.

In the long run, I'm certain that they could justify the costs via a cost-benefit analysis, but they cannot budget only for the cost of the wireless. They must also budget for the purchase of the laptops, their configuration, licensing and their maintenance.

Any legislation addressing the purchasing of a wi-fi system should first be preceded by a plan for equipping council members with the hardware necessary to take advantage of the wireless system.

Unfortunately, if such a plan exists, it's not been reported upon.

3) Why is council considering expenditures of funds prior to voting on the budget? I understand the need to have committee meetings on such topics, but would think that any action would wait until after the budget is passed.

It makes much more sense to me if council were to decide what they'd like to do, put such plans into the budget and not act until they finalize the budget. As it currently stands, there have already been ordinances presented authorizing expenditures that were not included in the 2008 budget submitted by the mayor. Common sense would dictate that the budget is first addressed - where spending can be prioritized and such items as a wi-fi system or even CareNet can be considered as part of the overall spending plan for the city.

If they pass such spending items ahead of the budget, council will be faced with having to cut something else in order to stay within the projected revenues.

Konop's explanation for his action was because the agency was 'unresponsive' to his requests for information about their economic development efforts. But that's not exactly truthful.

Last week, Konop asked for a detailed report from staff on current projects, time allotted to each project, and potential for capital investment, job growth or retention.

Jeannie Hylant, chairman of the LCIC board, asked that the request be delayed given that the agency was shorthanded and some staff members were out sick. She indicated that this request should and would be done after the new board members were in place, probably as part of the orientation for the new members.

Interestingly, the request from Konop did not follow established procedures. Konop asked for the information directly from staff rather than go through the executive committee. It's unknown why he didn't follow procedures when asking for information, but he has continually ignored the fact that the LCIC employees work for a 26-member board - and not exclusively for him. And this is not the first time that he's had an issue with the decisions of the board's executive committee and taken it out on staff. (Background in chronological order here, here, here, and here.)

However, not content with being told no, he spent time over the holiday weekend calling, emailing - and having his assistant call - the several economic development specialists - demanding that they appear in his office Tuesday morning at 8:45 in order to provide him with the detailed information.

Two staff members did appear as summoned with a third one declining to attend due to a scheduled meeting with a client.

So, for Konop to say that staff 'unresponsive' isn't true. They did, in fact, attend his scheduled meeting, putting themselves into a position of conflict between board member Konop and their boss, board president Hylant. Konop obviously has little regard for the staff of the LCIC that he would put them in such a position - and that says an awful lot about Konop.

No matter how you look at it, Konop was not stonewalled, as he's claimed, so that should be discarded as a reason for wanting to abandon the LCIC.

Further, he says that the agency is rudderless. Um...perhaps Konop has forgotten that he is the reason the agency is without an executive director? And, he's the one who's in charge of the search committee for the new director which he said was going to take only 90 days - but then extended to four months.

And how is that search going, Ben? You handpicked your search committee and then Oregon Mayor Marge Brown (also a member of the LCIC board), with the support of the executive committee, added some experienced economic development professionals to the group of academics and politically correct members.

So how many times have you met? What actions have you taken toward the search? Did you work up a job description? Have you posted the vacancy in any local or national publications? Have you had any conversations with potential directors? Do you think your public comments about disbanding this agency might have any negative impact on your ability to find someone to take the job?

Oh - that's right...you want to hire a firm to do this for you. In fact, you and your fellow commissioners gave the LCIC (that's YOU, by the way) two weeks in which to hire a director. Their failure to do so would mean that the Commissioners would hire and direct a search firm and then install a director.

Now, where the BCC gets the authority to expend county monies in order to conduct a search for a non-profit agency and then dictate the hiring of the found individual is beyond me. Having been a Commissioner I can confidently say that the Commissioners have no such authority - though they could give money to the LCIC for the LCIC to expend for this purpose - but that would mean that the LCIC executive committee would do as Konop wanted. And in the past they've proven to be reluctant to ask 'how high' when Konop has demanded that they jump.

No - the real reason Konop wants to remove the economic development designation from the LCIC is because it's finally dawning upon him that he can't control it. As one of 26 board members, he has little individual authority over the agency. Since Wozniak and Gerken voted to keep Gerken as the commissioner representative on the LCIC executive committee (which has all decision-making authority for the agency), Konop can ask the committee for things, but cannot dictate actions.

Further, he's realizing that many of his requests are unreasonable or not well-thought out. He wanted to schedule a tour of various businesses by some Chinese businessmen - but concerns about what they might do with access to certain proprietary processes and information was brushed aside by Konop, but not by the executive committee - and rightly so.

In a childish manner, as Konop fails to get his way, he takes his disputes public throwing what could be described as a temper tantrum about his perceived slights. He's doing this in the guise of trying to spur economic development within the county. But his efforts are having the opposite effect.

Business leaders and other economic development agencies have encouraged him to be a bit more diplomatic about publicly bashing his own economic development agency - especially when his dispute is with the board members and his fellow commissioners and NOT with the agency staff who are only following directions.

Further, his criticisms of an entity that's only been up and running for about a year and a half are considered by many to be pre-mature. To go from nothing to a functioning agency with staff, offices, and all the other things necessary to a new organization - in addition to the work they've done helping several local companies and establishing a model for K-16 workforce development would, in most circles, be reason for praise.

But if you're a board member whose individual initiatives have not been embraced (and maybe for good reason), you use your public office to try and destroy what you cannot control.

What many people might not know is how precarious the negotiations with Schindler Elevator, in Springfield Township, were during all of Konop's shenanigans. Ousted LCIC director Shawn Ferguson was the driving force behind their decision to stay and expand in Lucas County rather than move to another location. Konop's statements, and his demand that Ferguson had to go, almost cost the county this expansion. It was in spite of Konop - and due to the efforts of the other LCIC board members - that this planned expansion is going to take place.

I can only imagine what other companies think of these actions - or how such goings-on might drive them elsewhere in their search for expanded or new facilities.

When the LCIC was first re-organized, I had numerous and serious objections to the structure, the funding and other technical aspects. I still have those concerns and believe the bylaws of the organization and the structure could be improved. But like Wozniak and Gerken, I believe that a regional approach to economic development is the best way to go. Further, there are numerous ways to go about initiating such changes. And while there are probably many right ways to change the agency, the wrong way is the way that Konop has embraced - tearing down an organization because he cannot control it and setting coordinated economic development back decades in the process.

Well, there you have it ... Lucas County Commissioner Ben Konop's explanation for why he voted against business owner Robert Robinson for a seat on the Lucas County Improvement Corporation board. (My post on the appointment vote where I asked why he voted no.)

"Mr. Konop said he cast the dissenting vote against Mr. Robinson - who is white - because the board is made up mostly of whites and needs to be more representative of the county's diverse culture."

So he voted in favor of the other two nominees who happen to be African-American - and against the white man because he was white. I guess the depth of his experience was irrelevant.

So let's take a look at the resume of the man Ben Konop rejected.

He started out at The Lathrop Company where he was an engineering manager, project manager and vice president of operations at one of their affiliates in Columbus.

He left Lathrop and went to National City Corporation where he spent 25 years in executive management in all aspects of the business. For 10 years, he was the Chief Financial Officer and became known as the 'turn-around' manager. He was assigned a special project in Indiana where he was sent to "avert a total acquisition failure. Employing strong leadership skills, within short period of time, the acquired bank was back to its place of high esteem within the Indiana community. Working with local management in a hostile environment, rapidly rebuilt strong relations with corporate and community leaders, got local buy in from employees and corporate administration plus restored morale..."

He's been the president of the UT Alumni Association, trustee of the Edward Drummond Libby Trust Fund (fbo Toledo Museum of Art), member of the Chamber of Commerce, Pr0Medica Health Care board, past chairman of the Corporation for Effective Government, and Chairman of the Resource Development Committee of the Board of Boys and Girls Club - among others.

While in Indiana, he served as a business advisor to the Indiana and Purdue University at Forty Wayne (IPFW), was a member of the Fort Wayne Area Chamber of Commerce and was the chairman of their Workforce Development Committee.

He's also been a guest lecturer at IPFW and the University of Michigan.

But Konop rejected him because he's white.

And let's remember, Konop says we need to be more accountable in terms of the economic development of the area and the LCIC needs to have better results for their efforts. So a person like Robert Robinson would certainly have a lot to offer - some would say much more than the president of the local NAACP whose profession is as a teacher and union steward - or a personal financial planner who happens to also own a newspaper that endorsed Ben for election (pages 4 and 14).

This is not to say that the other two appointees are not qualified for the board - but to reject an individual like Robinson because of the color of his skin is racist and should condemned.

The three Lucas County Commissioners voted unanimously yesterday to fund mortgage bailouts for residents facing foreclosure. (my post, and The Blade article on the announcement)

Here are some questions I think should have been asked prior to them making such a decision - though I doubt they even thought about most of these. Primarily, they've got a lot of TANF money ($400,000 by news accounts) that they need to spend by the end of June or it goes back to the state and federal governments. So I'm sure this 'program' makes perfect sense to them.

1) How many foreclosures are there in Lucas County and how does this number compare to the past 30 years, especially to years when there were similar difficult economic times and downturns in the housing markets?

It's one thing to say we have some of the highest foreclosure rates in the country - it's another to look at the historical foreclosure rates within the county. Nationally, the foreclosure rates in the 1980s were higher than now - and yet, we somehow managed to survive without such programs. Why is that?

2) How many of the foreclosures in the county are a result of a one-time event (like loss of a job, unexpected medical bills, or even divorce - the reason for a large number of foreclosures) versus a personal decision to take a loan with an adjustable rate mortgage or to purchase a more expensive house than could actually be afforded?

3) How many of the $1,000 vouchers did the county give out to help people make mortgage payments? Basically, how many tax dollars have already been spent on what the Commissioners said was a failed attempt at addressing the problem? Are the recipients of the $1,000 vouchers going to be eligible to get another handout - this time up to $5,000? And, in keeping with the standard illogical actions of government - if the $1,000 didn't accomplish the goal, shouldn't more money be the solution?

4) What evidence exists to prove that handouts to these individuals will "stem the tide of rising foreclosure numbers" as Commissioner Tina Skeldon Wozniak claims?

5) How will this program avoid just prolonging the problem? Will there be a financial analysis of the individual's ability to meet their obligations PRIOR to giving them the handout? If an individual cannot meet their current mortgage obligations, will anyone actually recommend that they sell the home they cannot afford and move into housing that they can?

6) If an individual does not have the earnings or assets to continue paying their current mortgage costs, how will a one-time cash gift help them in the long-term? What long-term solutions will they be required to take? Should they have to take a second job - like so many already do - so that they can meet their financial obligations?

7) Will recipients be required to eliminate unnecessary spending PRIOR to being eligible for this handout? Or will individuals be allowed to continue to spend money on luxuries while getting taxpayer money to cover their necessities?

8) If credit counseling and other services are mandated as part of the problem, will individuals have to repay the $5,000 if they don't complete the courses? Or will they just be allowed to 'take the money and run'? If the money is to be repaid, how will it be collected?

9) How does this plan help all those who are making sacrifices in order to meet their mortgage obligations? How does this bailout encourage responsible citizens to continue to be responsible? Doesn't government spending - at all levels and for all things - drive up the costs for everyone, including those who are struggling, but are still able to pay their bills ... pushing those who are on the brink into the situation this program is trying to avoid?

Here's the problem: if the Commissioners were really interested in a long-term solution to the high costs of home ownership, they never would have voted to put increased - and new - tax levies on the ballot - as they have done every time they were asked.

If they were really interested in 'helping' people afford their homes, they wouldn't have spent 8% more in 2007 than they did in 2006 - or plan for another 2% increase in county spending in 2008. They'd actually reduce the cost of county government so they could reduce the amount of taxes (property and sales) it costs to pay for it.

If they were really interested in solving the problem, they'd work on creating a business-friendly environment so that companies would be profitable here, and would expand and grow, providing good-paying jobs for county residents.

However, all those things require hard work and making difficult decisions - including telling people 'no' when they ask for funds. And it's so much easier to just give out money to a few eligible families, get a bunch of headlines and then campaign on how you 'helped' people in need.

Tuesday, January 22, 2008

I plan to do a detailed post tomorrow about the shenanigans County Commissioner Ben Konop continues to attempt regarding the Lucas County Improvement Corporation. In the meantime, the Commissioners did appoint their six members to this board today.

Obviously, and in keeping with their long-standing tradition, the three commissioners each have a seat. Commissioner Pete Gerken was selected to continue as the commissioner representative on the LCIC Executive Committee. That was a 2-1 vote with Commissioner Tina Skeldon Wozniak continuing in her support of Pete in this position, and Konop voting no.

The other three board members are Kevin McQueen, Robert Robinson and WilliAnn Moore.

McQueen and Moore each were selected by a 3-0 vote. Robinson got a 'no' vote from Konop.

McQueen, according to his application for the position, is a financial representative for Northwestern Mutual Financial Network and is the publisher/co-owner of the Sojourner's Truth, a weekly newspaper.

Moore is a Toledo Federation of Teachers union steward, president of the Toledo Branch NAACP and a board member of one of the local community development corporations, ONYX (Organized Neighbors Yielding Excellence).

Robinson is co-founder of IP Dynamics, LLC. and its forerunner, CWS Advisors. These companies specialize in financial turnaround management, startups and recapitalizations, according to his resume. Prior to this, he was the chief financial officer at National City Corporation. Before banking, he held several management positions at The Lathrop Company.

While there are certainly positive qualities in all these individuals, I find it interesting that the only individual with significant business experience and skills relevant to economic development (Robinson) got the only 'no' vote - and that by the Commissioner who thinks the LCIC needs to be more accountable for actual economic development within the county.

I can only speculate as to Konop's reason for voting no, since he's stated that he doesn't have a 'moral obligation' to respond to my emails - but that's another post for another time. Is it because he thinks Robinson is a 'Gerken crony'? Or is it because Robinson has extensive business experience and would be very likely to see through Konop's childish behavior? It would be nice if Konop would explain his vote against Robinson while voting for McQueen and Moore.

And while we're asking questions that Konop should answer, perhaps he could also explain just how that search for a new executive director of the LCIC is going ... after all, he's the one who thought they'd be able to find a replacement within 90 days - which he promptly modified to four months. Perhaps he's finding it much easier to criticize inappropriately than it is to actually perform...

Walter Williams, the John M. Olin Distinguished Professor of Economics at George Mason University, is one of my favorite columnists. He and Thomas Sowell have a way of making economic information seem simple - and understandable.

As I was reading his column on the subprime bailout, I couldn't help but think that our three County Commissioners should have a conversation with him.

When the commissioners meet today in their regularly-scheduled board meeting, they will approve a bail-out plan for local residents facing foreclosures, which includes a payment of up to $5,000 to help with their mortgages.

As Williams points out, President Bush's plan to 'help' people facing foreclosure "is a wealth transfer from creditworthy people and taxpayers to those who made ill-advised credit decisions, and that includes banks as well as borrowers. According to Temple University professor of economics William Dunkelberg, 96 percent of all mortgages are being paid on time. Thirty percent of American homeowners have no mortgage. Delinquency rates were higher in the 1980s than they are today. Only 2 to 3 percent of all mortgages are in foreclosure. The government bailout helps a few people at a huge cost to the rest of the economy.

Government policy got us into the subprime mess and government's measure to fix the mess is going to create more mess."

The Commissioners plan to use TANF monies for their local bail-out plan. TANF (Temporary Assistance to Needy Families) rules are extremely lenient, allowing local governments huge leeway in how they choose to allocate the funds. So, while we can debate the logic of such assistance, it is allowable. In this case, though, the eligibility will be up to 300% of poverty level (higher than for some other assistance which is capped at 200% or 250%), which is about $57,000 for a family of four. And TANF only applies to families, meaning that you must have a minor child residing in the household.

(Aside - in constantly increasing the eligibility requirements, government officials do two things: 1) they increase the numbers of individuals actually participating, earning them votes from a wider group and making more people dependent upon government for such 'help.' 2) they use more of their allocation which, if not spent, is returned to the state or federal governments for redistribution - meaning that they'll continue to qualify for the same or more funds in the future due to total use of current monies. The 'use it or lose it' mentality is what contributes to the never-ending government program and the lack of any return of unspent funds to the taxpayer who provided such funds in the first place.)

The way TANF works, the Commissioners will probably take proposals from local agencies who will then screen/qualify applicants and provide the actual assistance. Participating agencies will be allowed to take a portion of the funds for their administrative costs. As part of the requirements, the Commissioners will mandate recipient attendance at comprehensive credit counseling and financial literacy courses to "ensure their long-term financial health." (as if any government program or training class could 'ensure' such a thing...)

TANF funds come from the federal government, through the state, down to the counties. But it's not some nebulous account earning monies that are then distributed around the country. TANF comes from the taxes we pay, with both the feds and the states taking a share of it off the top to 'administer.'

And all of us who also face tight budgets, but who made good financial decisions, will be paying that $5,000 the others will receive.

As Williams says, this is nothing but "a wealth transfer from creditworthy people and taxpayers to those who made ill-advised credit decisions, and that includes banks as well as borrowers."

And I, for one, am tired of it.

This isn't about helping those who are less fortunate. This is about making them face the outcomes of their own decisions. When you make a bad decision, you learn to not make a similar bad decision by actually having to suffer the consequences. Sometimes, those consequences can be pretty severe - like losing your home. In many instances, this is the best way for an individual to learn a lesson - and the most memorable lessons are primarily those that came as a result of severe consequences.

And how, exactly, will a $5,000 gift of my tax dollars actually help a family facing foreclosure? It won't - all it will do is prolong the inevitable. When a family cannot afford the house they are in, giving them a gift of other people's money will only allow them to stay in the bad situation for a bit longer. After utilizing the $5,000, they will still be in a house they cannot afford and some will then expect that future 'bail outs' will be available when the situation again results in the potential loss of their home.

Before everyone starts off on evil predatory lenders, remember that the government is the one who mandated that banks give out loans to individuals of questionable financial means in the first place. And as this New York Times story details, predatory borrowing may have been the bigger problem.

"As much as 70 percent of recent early payment defaults had fraudulent misrepresentations on their original loan applications, according to one recent study. The research was done by BasePoint Analytics, which helps banks and lenders identify fraudulent transactions; the study looked at more than three million loans from 1997 to 2006, with a majority from 2005 to 2006. Applications with misrepresentations were also five times as likely to go into default.

Many of the frauds were simple rather than ingenious. In some cases, borrowers who were asked to state their incomes just lied, sometimes reporting five times actual income; other borrowers falsified income documents by using computers. Too often, mortgage originators and middlemen looked the other way rather than slowing down the process or insisting on adequate documentation of income and assets. As long as housing prices kept rising, it didn’t seem to matter.

In other words, many of the people now losing their homes committed fraud. And when a mortgage goes into default in its first year, the chance is high that there was fraud in the initial application, especially because unemployment in general has been low during the last two years."

And this fact brings up the next concern - how, exactly, will the rules of this new handout be written? Will the focus be on finding ways to keep people comfortable in their inability to make their financial obligations? Or will the effort be to get such eligible families into living accommodations that they can actually afford - even if it means an apartment instead of their current home?

The current plan for this assistance will include mandatory credit counselling and financial literacy courses - which is a good thing, even if it is after the fact. I just wish it wasn't accompanied by the carrot of up to $5,000 cash. But that's how government gets individuals into such 'training' - by offering them cash in order to 'learn' what they should already know.

(I once had a county employee tell me that if we didn't offer people money to participate, no one would actually be in a certain program. My response, of course, was that this was evidence we didn't 'need' the program in the first place and maybe we could then give the funds for it back to the taxpayers. My suggestion was seen as sacrilege and was immediately dismissed as terrible for the individuals because, whether they knew it or not, they did 'need' this government assistance.)

In the end, I think many Lucas County residents will feel like I do ... if my tax dollars are going to go toward anyone's mortgage, it should be my own.

UPDATE: From the actual resolution passed by the Commissioners today:

Lucas County Department of Job and Family Services is seeking provider(s) to provide a full range of housing assistance to TANF/PRC (Temporary Assistance to Needy Families/Prevention, Retention and Contingency)-eligible Lucas County homeowners by way of a multi-faceted approach, including, but not limited to:

Services are to be provided from approximately April 1, 2008 through June 30, 2008 with a twelve month renewal option of July 1, 2008 through June 30, 2009.

Can someone please explain to me why this area needs 15 months of such 'service'??? Seems to me that the 'crisis' will be over way before then! And if I understood correctly, the cost of this is about a half a million dollars!

Why is it that we must continue to pay high taxes in order to preserve 'public services'?

When we, as individuals, are strapped for cash, we start cutting back. When was the last time you actually saw government 'cut back'? And I don't mean by delaying pay increases or reducing certain types of service. I mean seriously cutting?

Over the last 20 years, numerous companies have restructured, laid off employees, reorganized, etc... Do you recall our local government ever doing anything like that? I don't!

The City of Toledo's Development office has three development specialists, a senior development specialist, a real estate specialist, a manager of real estate, an administrator-finances/project compliance, and a commissioner. That's an eight-person department in addition to the Lucas County Improvement Corporation, the Toledo-Lucas County Port Authority and the Regional Growth Partnership - all of whom do economic development.

How many supervisors, superintendents, managers, commissioners and directors does one city really need? Does the city really need a public Youth Commission? Isn't this something that the numerous youth organizations in the city can be responsible for?

* promote the value of diversity, dignity and the quality of life for people with disabilities. * assure that people with disabilities receive services and other assistance and opportunities they need to achieve their maximum potential through increased independence, productivity, and integration into the community.

How much could the city save by eliminating all but the most basic of services?

Such elimination would certainly result in cries and moans from various groups who believe that such government departments are a necessity. But many of these tasks are done to cater to special interests - not to meet the basic government service requirements. And many of these departments might be nice, but with dwindling tax revenues, extremely tough local economic conditions and the corresponding limited funds available to residents, they do not constitute a priority for the city as a whole.

So why must we forever be expected to continue to fund government in spite of our own decreasing incomes? That's a question I'd love to have our Mayor and City Council members answer - especially when it comes to the vote on the 3/4% payroll income tax.

Think any of them would actually answer - or would tap dance music be required?

Monday, January 21, 2008

But that certainly won't stop Ohio Senator Sherrod Brown from including such funding in the fast-tracked 'stimulus' bill under consideration in Washington.

"He said assisting those who have already suffered, such as with money for food banks, the home heating assistance program, and extended unemployment benefits, are the elements he wants in a "stimulus" package."

First of all, numerous articles in financial publications, and numerous economists, say that tax rebates won't stimulate the economy.

It was tried in 2001 and really didn't work, but the tax cuts passed in 2003 did. And if you don't believe that, just look at what the stock market did in response to the announcement of these rebates. It went down because Wall Street and everyday investors understand that any rebates have to come from somewhere, which means that Congress will have to borrow the money - putting increased debt on the shoulders of future generations.

But, even if you might somehow convince yourself that tax rebates are the way to go to head off what might be a recession, how does money to food banks stimulate the economy?

If you extend unemployment benefits, you encourage recipients to stay in the program longer rather than actually taking a job - even if it's a job paying less than what they were making previously. The same with home heating assistance - all these programs do is make people comfortable in their current economic status, encouraging them to continue in such circumstances.

Any money that the government gives out has to come from somewhere - and that means you and me - and everyone else who's already struggling with their own increasing costs, including taxes which will have to be imposed on future generations to cover the promises being made today.

This is a re-distribution of wealth - and it won't cause the economy to grow. In fact, it may have the opposite impact of causing those most capable of spending to decide to save instead.

Any way you look at it, taking from some to give to others does not stimulate the economy- even if it is for a 'good cause' like a food bank.

In case you missed it, Sunday's Toledo Blade had a lead article about the 30th year of the One Percent for Art program.

In 1977, Toledo began earmarking public dollars for city art, setting aside one cent for each dollar the city spends on construction. Since then, about $3.5 million in local tax dollars and $1.2 million in private and other funding have been spent on 47 sculptures and murals.

I'll take exception to the article itself, as it seemed more of a glowing editorial using such phrases as:

* "It seems almost ridiculous to imagine that a city could be graced with art, one penny at a time."

* "have enhanced the urban landscape"

* "an exemplary lesson in economies of scale"

* "Like apple pie and motherhood, it's nigh on to impossible to find a detractor of the program that has spread beauty" (oh really? perhaps you haven't looked hard enough.)

* "Art in high-profile, urban locations softens hard edges and refreshes the soul. It can create a gathering place, a conversation piece."

But along about the sixth paragraph, was this:

"On March 4, Toledoans will be asked to renew the 0.75 percent temporary income tax, which, if passed, will increase the budget for public art for the first time in four years."

Part of the problem, as the article details, is that art is more expensive now, due to an increase in the costs of raw materials, and that art purchased must also be maintained, with such on-going care taking up about a third of the yearly budget.

Then there was this: "...the program's job description has expanded,..." But of course! Isn't that what happens with just about every government program? They expand to encompass more duties and responsibilities, and then need more money for the expanded duties and responsibilities, and then take on more duties, and then need even more money...and on and on it goes.

The program has changed in a positive way over the years, going from completely funding art projects to providing incentives for private investment.

"Instead of purchasing sculptures and murals, the program has been reshaped to fit its bigger responsibilities and smaller budgets. It "seeds" the acquisition process, spending money to select a pool of potential artists for a project and launching a fund-raising campaign to get the piece built."

And this is good - but it demonstrates something else - that private investment is available for such projects, so we don't NEED the public dollars for this purpose.

And even if you think continuation funding is NEEDED, considering the other obligations of the city and the priorities we should be focused upon, do you really think ADDITIONAL funding should be provided?

I don't. I think the Arts Commission of Greater Toledo could continue to solicit and coordinate the private funding of public art. And that ALL the funds currently dedicated to this project could be put, instead, to new police vehicles, roads, or - dare I say it - the reduction or elimination of the garbage tax, which will expire unless passed as a permanent source of funds in the 2008 budget.

Art is nice - when you can afford it. With so many citizens in Toledo struggling, it seems frivolous to take hard-earned and limited dollars from the citizens in order to purchase (or even leverage) art. Considering the comments many have made about the 3/4% tax, it's going to be hard enough getting it to pass as is, much less getting it to pass when more of those limited funds will go toward increasing the budget for art, which is certainly not a necessity.

Expect cries about the 'quality of life' and how this is actually 'economic development' in an attempt to convince people to vote for it.

But remember, like art, 'quality of life' is in the eye of the beholder. My quality of life would be better if I didn't have to constantly avoid potholes and poor roads, much more so than if there is a mural on the side of some building. Your quality of life might be enhanced more by new playground equipment in parks rather than if there was a statue there.

It's all about priorities - and increased funding for the One Percent for Arts program should not be a priority when it comes to using the 3/4% payroll tax revenues - no matter how 'progressive' such a program might be.

Friday, January 18, 2008

UPDATE:I've added a note about Investor's Business Daily recent editorial at the bottom of this post.

Just about every media outlet has covered the recommendations coming from the National Surface Transportation Policy and Revenue Study Commission's two-year study that was released Tuesday. (report available here)

Basically, the Commission is recommending that the current gasoline tax of 18.4 centers per gallon be raised 40 cents over the next five years. Under their proposal, the tax would go up anywhere from 5 cents to 8 cents each year and then indexed to inflation afterward to help fix the nation's transportation infrastructure.

The study also calls for a new federal bureaucracy to centralize transportation decision making, new limitations on states’ abilities to attract private sector investments and a first of its kind federal tax on all public transportation and intercity passenger rail tickets.

U.S. Secretary of Transportation Mary E. Peters, and Commissioners Maria Cino and Rick Geddes, won't sign the final report, releasing their own recommendations under a 'Chairman's Statement.'

From their press release:

“Raising gas taxes won’t improve traffic congestion, it will only perpetuate our ineffective reliance on fossil-based fuels to fund infrastructure and send more of Americans’ hard-earned money to Washington to be squandered on earmarks and special interest programs,” Secretary Peters said. “A better way forward is to provide incentives to states willing to pursue more efficient approaches and to invest federal funds more effectively to give commuters real relief from gridlock.”

The Secretary said she was deeply troubled by the Commission’s call for an up to 40 cent per gallon federal gasoline tax increase over the next five years, rising to up to 91 cents in 20 years when indexed for inflation. She added the report also assumes that states will increase their gas taxes by up to 60 cents per gallon over the next five years. She said recent studies, including one from the Government Accountability Office last summer, have concluded gas taxes don’t work to reduce traffic congestion.

“There is nothing to indicate that Washington would do a better job spending billions more of the taxpayers’ money than it has so far,” said Secretary Peters. “The answer isn’t more taxes and added layers of bureaucracy, it is having the courage to say the current system is broken and it is time to find a better way to invest in, manage and operate our transportation system.”

Here's the thing...following the collapse of the I-35W bridge in Minneapolis, Senator Tom Coburn (R-Oklahoma) offered an amendment calling on the Senate to place a temporary moratorium on transportation pork until all structurally deficient bridges are repaired. Amazingly, the Senate voted 82-14 to prioritize pork over bridge repairs in the transportation budget. (My previous posts on Sen. Coburn's efforts on the Transportation bill are here and here.)

In July, Taxpayers for Common Sense reported that the FY08 Transportation, Housing and Urban Development and Related Agencies Appropriations bill contained more than 1,400 earmarks worth a total of nearly $2.2 billion for every state in the nation except, interestingly, Alaska. (Their listing of the earmarks is available here.)

TCS says:

"One of the more interesting aspects of the manager’s report is the discussion about the dire financial straits facing the Highway Trust Fund (HTF). The HTF is the account in which all of the nation’s gas tax receipts are deposited for use repairing and building the nation’s highway system. The HTF will run a negative balance sometime in 2009 (since this is the FY08 budget cycle, that’s next year!), yet the Congress and the President fail to make any substantive proposals that would alter this outcome. The Committee unhelpfully points out that the President didn’t propose any new ideas, and then happily slices and dices a number of programs into 1,400 earmarks.

TCS has long maintained that earmarking is one of the problems that has led to this bleak outlook for the HTF. Lack of prioritization has been a huge problem for our nation’s transportation program for many years now. When the money coming out of Washington is so thinly sliced, it spreads it out to too many projects for the trust fund to support. In addition, when transportation decisions are made based on political might (ie. earmarks) instead of on the nation’s true transportation needs, the priorities still need to be funded. Again, this spreads the limited financial resources too thin and the trust fund balance slips toward the red....It is no surprise that the Chair and Ranking of the Appropriations Committee (Reps. Obey (D-WI) and Lewis (R-CA)) and the Transportation-HUD subcommittee (Reps. Olver (D-MA) and Knollenberg (R-MI) were some of the biggest winners in this bill.

In all, the Appropriations Committee garners more than $164 million, nearly 23 percent of the $724 million in Congressional adds and increases, yet have only 17 percent of the House’s total membership.

Other earmarks included in the bill:

$100,000 for the Murray Athletic Center at Elmira College (a private institution) in Horseheads, NY, secured by Rep. Rand Kuhl (R-NY)$250,000 for construction at the Walter Clore Wine and Culinary Center in Prosser, WA, secured by Rep. Doc Hastings (R-WA)$100,000 for the Wakely Lodge Resort, a golf course, for renovation of the Wakely Lodge in Hamilton, NY, secured by Rep. John McHugh (R-NY)$81 million (admin request was $74.2 million) for the Center for Advanced Aviation System Development (CAASD), which is a project of the Mitre Corporation, headquartered in McLean, Virginia and Bedford, Massachusetts. This was not disclosed as an earmark. $750,000 for the Indian Street Bridge project in Martin, Florida, secured by Blue Dog Democrat Rep. Mahoney (FL).$1 million (two earmarks) for the Interstate 66 project in Kentucky, secured by Rep. Harold Rogers (R-KY).$1 million for the Ohio River Bridges Project in Louisville, KY, secured by Rep. Yarmuth (D-KY).$50,000 for the National Forest Recreation Association, for construction of a National Mule and Packers Museum in Bishop, CA, secured by Rep. McKeon (R-CA).$250,000 for Downtown Roanoke (VA) for Infrastructure renovations for awnings of the historic market, secured by Rep. Goodlatte (R-VA).$100,000 for the Town of Boydton (VA) for development of the Walking Tour of Boydton, secured by Rep. Virgil Goode (R-VA)$250,000 for Phenix City (AL) for riverfront development, secured by Rep. Mike Rogers (R-AL)

Perhaps if they weren't so busy spending the transportation funds on items like wine and culinary centers, museums, markets, walking tours and golf courses, they'd discover they didn't NEED a new gas tax to cover the costs of transportation infrastructure improvements

In the end, if you give the federal government more money, they will spend it on their own pet projects...all the while claiming they don't have enough money and then voting to make us pay more in taxes...it's a vicious cycle.

The problem isn't a lack of money for the needed infrastructure improvements - it's the lack of making such improvements the priority. If they had been truly interested in the infrastructure, 82 senators wouldn't have voted to table Sen. Coburn's temporary moratorium on transportation pork.

And while I blame Congress for doing this, I also blame the American people for letting it happen.

UPDATE:

A federal panel wants to triple the gasoline tax to improve the nation's infrastructure. A better solution is to limit spending from gasoline tax revenues to essential -- and real -- highway projects, says Investor's Business Daily (IBD).Consider:

* A mere 60 percent of revenues collected from the gas tax are left for essential road work. * One-tenth of federal transportation spending is pork; in the last transportation bill, more than 6,000 pet projects costing $24 billion drained money away from where it was needed.* Gas tax revenues are used to fund bike paths, nature trails, pedestrian walkways, visitors centers, public parks, parking lots and museums.

In an era of painfully high retail fuel prices, the average U.S. household is paying roughly $214 in federal gasoline taxes each year, says IBD. Add in state and local levies and the total ranges from $313 in Alaska to $588 in California. Congress shouldn't dare ask for more.

Yes, the country's roads and bridges need work. It would be wrong, though, to pry more money from motorists when the job can be done by spending current revenues they way they are supposed to be spent. The problem is not a lack of revenues, but a lack of character in Washington, says IBD.